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Nvidia’s ‘AI Factory’ narrative faces reality check as inference wars expose 70% margins
Alternative chip makers expose the contradiction in Nvidia's AI factory story: How can inference be a commodity while commanding 70% margins?
Sean Lie, CTO of Cerebras, a competitor, was equally direct: “I don’t think Nvidia minds having all of the service providers fighting it out for every last penny while they’re sitting there comfortable with 70 points.” This 1:1 spend ratio on AI tokens versus revenue represents an unsustainable business model that panel participants contend the “factory” narrative conveniently ignores. Some of the teams had built AI applications that began to work better than human beings for the first time, and the demand for compute was so high, they were going to need to double or triple the global data center footprint quickly.”
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